Rule notified by MCA:

MCA has vide its notification dated 24.03.2021, notified the Companies (Accounts)
Amendment Rules, 2021, which is effective from 1st April 2023.

Every Company using accounting software shall use only such accounting software which
has a feature of recording audit trail with edit log, ensuring that the audit trail cannot be
disabled.

An audit trail is defined as a step-by-step sequential record which provides evidence of the
documented history of financial transactions to its source. An auditor can trace the financial
data of a particular transaction right from the general ledger to its source document with
the help of the audit trail.

Role of Auditor:

According to the related amendments to The Companies (Audit and Auditor) Rules, 2014
(Audit Rules), auditors are now needed to give a statement in their statutory audit report
((in the section Report on Other Legal and Regulatory Requirements,) stating whether,

(a) All the business user whose account been audited must incorporated in
characteristic of audit trail (edit logs or change log) recording via accounting
software.
(b) Audit trail characteristic was started throughout FY & Same had not been Changed
or tampered it and
(c) such kind of above edit logs or audit trails have been maintained for duration as
specified by the above rules.

Role of Company:

To enable the track and trail option of Tally or other accounting software, of transaction
for Audit in accounting system.

The Business will required to make ensure that Audit trail of all accounting records can
record changes to the transaction, such as when the changes were made, who made them,
and what data was changed.
System support by TallyPrime:

Audit trail (edit log) features of TallyPrime Edit Log Release 2.1

The latest release 'TallyPrime Edit Log Release 2.1', is enhanced with the edit log feature
that caters to the amendment released by the Ministry of Corporate Affairs (MCA).
Following are the features of TallyPrime edit log release:

• Track the edits for masters and every transaction

• Capture the date details and username when such changes (edits) are made
• Difference report to show the elements of the version that have been modified
• Reports are enhanced to filter the edited transactions
• Designed to ensure edit log feature will be enabled all the time to meet the MCA
guidelines of ‘Edit trail cannot be disabled.’